Pictured above: Helen Longstaffe, Director of Business
Space agency at DTZ in Nottingham
The latest DTZ Research UK Property Times Industrial market
report has revealed that the overall volume of available space of
buildings over 50,000 sq ft fell in Q2 due to sustained high levels
of grade A take-up and a reduced rate of return of grade B and C
stock.
Total take-up fell 15 per cent although the proportion of grade
A space remained elevated at 48 per cent of the total, with the
outlook for prime headline rents set to remain stable.
The report predicts that the availability of large volumes of
grade B space means the market will prove to be a battleground for
landlords during 2010, with many looking to customise stock to
attract smaller local occupiers.
A slowdown in the return of secondhand buildings over 50,000 sq
ft back to the market means DTZ anticipates that availability will
peak in 2010. Annual take-up in 2010 is set to increase by a third
on 2009 volumes, driven mainly by tenants taking grade A or good
quality grade B space.
In the East Midlands take-up fell back in Q2 although increased
levels of activity are expected in the second half of 2010. Third
party logistic providers and non-food retail companies dominated
take-up in the quarter with White Stuff, AT Logistics Solutions and
Buy it Right all taking space in the region. The report anticipates
an improvement in take-up in H2 2010, particularly as Marks &
Spencer is close to signing on a 900,000 sq ft design and build
scheme at the East Midlands Distribution Centre.
Helen Longstaffe, Director of Business Space agency at DTZ in
Nottingham, commented: "As a result of the competitive deals
currently on offer from some landlords for existing grade A stock,
we have seen a significant amount of take-up in the region over the
last six to nine months. This has resulted in a comparative lack of
good quality units along the M1 corridor. There are a number of
units currently under offer in the region which will further
exacerbate this situation, leaving design and build as the only
viable option for many occupiers."